Norilsk Nickel donates $143mn to fight coronavirus, steps up its social care of workforce in Russia’s remote Far North

Norilsk Nickel donates $143mn to fight coronavirus, steps up its social care of workforce in Russia’s remote Far North
Russia's biggest metallurgical company Norilsk Nickel has donated $143mn to fight coronavirus and has stepped up its social care of workforce in Russia’s remote Far North / Norilsk Nickel
By Ben Aris in Berlin April 15, 2020

Russia’s biggest metal and mining company Norilsk Nickel, owned by tycoon Vladimir Potanin, has donated RUB10.5bn ($143mn) towards the fight against the spread of coronavirus (COVID-19) virus and to protect the health of its workers.

“The money will be used to purchase medical equipment, medicines and personal protective gear for local healthcare institutions, the company’s operating sites and employees, as well as to provide additional support for the company employees and small and medium-sized enterprises (SMEs) located in NorNickel's regions of operation,” the company said in comments emailed to bne IntelliNews.

NorNickel's main nickel and PGM (platinum group metals) mines operate in the Norilsk industrial region, on the Kola Peninsula and in Zabaykalsky Krai in Russia’s Far North – some of the most extreme climate conditions in the world.

The plant was originally founded as a Gulag camp in the Stalin era but has since become one of the most important companies in the Russian economy and the biggest producer of nickel in the world. Because of its extreme location the company has always been heavily involved in caring for the local community from which it draws its workforce.

The donation is part of NorNickel’s growing focus on environmental, social and governance (ESG). The company implemented a comprehensive ESG policy more than a year ago and has already invested more than $2bn in removing sulphur dioxide gas from its emissions – one of the GHG gases proscribed by the Paris convention – as well as closing some of the more problematic metal plants. And the company said earlier this year it intends to invest another $3bn in the coming years to clean up its emissions.

However, the coronavirus crisis has shifted the attention of the leading Russian corporations on from the “E” in ESG to the “S” – responsible corporate actions for the benefit of society. NorNickel is in the vanguard of a growing number of top Russian conglomerates that have picked up the baton in the current crisis and is putting its money where its mouth is.

The Soviet legacy means companies like this have always maintained close ties with the municipalities of the towns and cities where they work. NorNickel has purchased medicines and medical equipment for testing and treating the coronavirus, including ventilators, specialist ICU equipment and equipment required for re-profiling the existing healthcare facilities so they can effectively provide specialist treatment to the victims of the virus. To beef up the local medical facilities to tackle the crisis the company has also bought two stationary laboratories and five mobile laboratories to test for the coronavirus infection that will shortly be put into operation.

“Measures have also been taken to increase hospitals’ capacity. In Norilsk, the number of beds in the city’s hospital infectious disease ward has more than doubled from 45 to 100, whereas in the worst-case eventuality this number can quickly be increased to 1,000,” the company said.

On the Kola Peninsula, in the same part of the world where the company also has operations, 120 beds have been set aside at the company’s corporate clinic for patients who require observation.

In the city of Monchegorsk, also in the Kola Peninsula, 40 additional adult and 20 children’s hospital beds have been set up for patients requiring treatment from the infection, with another 30 additional hospital beds and 20 additional beds for observation in the Pechenga district.

“In addition, NorNickel funds have been used to set up a 54-patient infectious disease ward at Monchegorsk Hospital to provide treatment to coronavirus patients. In April 2020, the company will spend about RUB3bn [$41mn] to purchase medical equipment, personal protective gear, and develop local healthcare infrastructure,” the company said.

As part of the company’s social responsibility of its ESG policy, the well-being of its employees is a “top priority”, the company told bne IntelliNews.

The company has already sent all its employees to work at home on full pay, with the exception of those whose absence at the workplace may affect business continuity. As the company operates mining equipment, some of which cannot be turned off, employees working the continuously operating units are being paid extra. In addition, from March 30 to April 30, the company has decided to pay full wages to those who cannot work from home, as well as to the employees with children who are not able to perform their job duties because they have to stay at home with their children following the closure of preschools.

“Given that the coronavirus pandemic has led to the forced cancellations of trips booked by our employees planning to spend their vacation at corporate health resorts or elsewhere, NorNickel is fully compensating employees for the purchase of corporate health resort package tours and has committed to cover any losses incurred as penalties for cancelling booked air tickets. This also applies to tickets purchased for employees’ family members where a group travel was booked for such family members,” the company said.

In order to provide Norilsk’s population with high-quality internet services to support remote work and training, NorNickel’s subsidiary Edinstvo, the operator of the local fibre-optic network, has expanded its high-speed internet capacity allotted to local mobile operators by 45% at no extra charge.

As Norilsk is an isolated town in the northern wastes – the locals refer to the rest of Russia as “the mainland” – the company is working with the local authorities to prevent the spread of the virus in the region. Norilsk’s municipal administration has already ordered the local airline NordStar to temporarily suspend regular passenger flights to the regional capital of Krasnoyarsk, which has been affected by an outbreak of coronavirus. Nevertheless, air travel contact with Krasnoyarsk is being maintained, with individual flights being subject to approval by an interdepartmental commission established by order of the city mayor.

While many of the people in Norilsk work for NorNickel, which remains the heart of the local economy, these workers are in the minority. The city boasts its own local economy, replete with small businesses and service companies that have also been badly affected by the stop-shock of the pandemic and need help.

“To support local SMEs, NorNickel has granted rent holidays to more than 100 small businesses that are tenants of the company’s properties in Norilsk. Kola Mining and Metallurgical Company has offered similar benefits to its SME partners,” the company said.

“The winners of NorNickel’s flagship corporate philanthropy project, World of New Opportunities, who previously received loans from NorNickel for the development of their social businesses, have also been granted rent holidays for six months,” the company added.

And finally the company has rallied its labour force to help the disadvantaged and elderly. “Volunteer teams” have been formed in all of the company’s cities of operation, participating in the charity movement “Volunteers Rush to the Rescue” to deliver food, medicines and other essential supplies to those in need. Amongst the services they provide is to teach the older residents how to use the internet and make face masks out of gauze for at-risk citizens and doctors.

NorNickel president Vladimir Potanin said: “NorNickel has approached this crisis with a sufficient margin of safety to maximise protection for our workers and all residents in the cities hosting the company’s enterprises, to support SMEs, and to help the local administrations. I am confident that together with our employees, local people in the cities where we operate, and the nation as a whole, we will be able to step up to this challenge.”